The Superior Court decision in Rubner v. Bistricer quoted from earlier case law and texts stating that: ““The law certainly is not so absurd as to force a man to take an estate against his will.” There is no authority to the effect that the disclaimer must take place in a court of record; it may be made by deed, or even by conduct. Prima facie, the disclaimer operates from the time of the testator’s death and makes the gift void for certain purposes ab initio.”1 So we know that people can say no to a bequest – but what if they change their mind?
What’s the Ketch?
Denis Woodward was gifted a type of boat (a ketch) in his father’s will, but Denis did not want to pay the expenses related to the ketch and so he disclaimed the gift. After Denis had disclaimed the gift, the trustees of his father’s estate entered into a transaction involving the ketch in order to settle a related claim abroad, and the question then arose as to whether Denis could retract his disclaimer. As Denis would learn, once an estate trustee relies on a disclaimer, it can no longer be retracted by a beneficiary.
Background
Denis and his father, the Deceased, entered into an agreement under which Denis would shoulder the costs of completing work on the ketch and for it to be transported from a boatyard in Denmark, where it had been stored since the 1970s, to Canada.2 In exchange, the Deceased promised Denis that he would bequeath the ketch to him in his will.3 True to his word, the Deceased indeed included a provision to that effect in his will. Denis, however, did not make good on his promise. Although he did undertake and pay for some of the work on the ketch, when he tried to have the ketch moved from the boatyard, he was told there were storage arrears, but he disputed some of the storage fees and refused to pay the boatyard.4 By that time, the Deceased had developed Alzheimers, and his daughter, Denis’ sister, was acting as his “agent.” The sister spoke with the Deceased in his lucid moments and he was apparently adamant that he did not want to spend any more money on the ketch and that it would be up to Denis to foot any future bill.5
It is clear from the evidence the Court chose to highlight that there was some underlying familial discord, even prior to the bout over the boat. In what would prove a determinative move, Denis penned a letter to his sister, which read:
“This letter will serve notice that unless the situation changes in a manner that is acceptable to me by the end of March 1995 any rights I may have to the ship in Denmark are being relinquished and at the same time I shall be asking for full compensation of all costs and time spent on and for the ship in Denmark.”6
Essentially, Denis was prepared to disclaim his gift unless the fees were paid– by someone other than him. Ever the devoted letter-writer, Denis, having not received a satisfactory response by his deadline, wrote to his father:
“Dear Dad, You probably will not understand this or the reason for the letter. I have tried to deal with Caryl in reference to the boat in Denmark and with the total situation with no success. It is not my battle and (sic) can not go on with it anymore. I therefore relinquish all rights I may have had to (sic) with the boat and the contract of agreement between us. Sorry but without Caryl’s cooperation I have no further interest.”7
Someone is in Arrears in the State of Denmark
The Danes would wait no longer for the family to pay the storage arrears for the ketch, and so the boatyard brought a claim against Denis in March of 1996.8 Denis claimed that he was not the proper defendant, since he had disclaimed his gift.9 Denis testified that he had not seen the Deceased’s will, implying, as the Court pointed out, that he did not anticipate or accept the bequest.10 His lawyer had to concede that had the will not included the bequest, Denis could not have sued the Estate in light of his termination of the agreement with the Deceased.11 Denis even characterized the agreement with his father as merely a power of attorney– a characterization which the British Columbia Supreme Court rejected.12
Denis Changes Course
The Deceased died approximately eight months after the boatyard filed its claim, and when his will was read, the provision reflecting the agreement regarding the ketch was indeed there.13 Denis’ lawyer wrote the Deceased’s solicitor who was, along with Denis’ sister, the co-estate trustee of the Deceased’s estate. Denis’ lawyer noted that Denis had renounced the agreement with the Deceased and therefore, the storage arrears ought to be borne by the Estate so that the ketch could be delivered to Denis.14 In Yiddish, that is called chutzpah– gall.
The Court Takes the Wind Out of Denis’ Sails
The Court found that it was clear from the record that Denis had disclaimed both the gift and any contractual claim under the agreement prior to the Deceased’s death.15 His effort to reclaim the gift based on the will was to no avail, as the Court found that he had no beneficial interest under the will and was estopped by his termination of the agreement from making a claim against the Estate.16
The arrears themselves figured prominently in the Court’s decision. Since the arrears had to be paid, the estate trustees of the Deceased’s estate wanted to sell the ketch in order to pay them off. Relying on Denis’ disclaimer, the estate trustees concluded the deal and settled the debt.17 The Court noted that this was in the best interests of both the Estate and Denis himself.18
Of Mariners and Mischief
The Court, not satisfied with merely rejecting Denis’ attempt to reclaim his gift, chided his claim as “mischievous” since he had provided no evidence that he had the means to retrieve the ketch– even if the Estate had honoured the bequest.19 More importantly, however, was the fact that the estate trustees had relied on Denis’ disclaimer.
Conclusion
So, is it possible to change your mind once you have disclaimed a gift? In short, it depends. If a beneficiary disclaims a gift, they may be able to retract their disclaimer in order to reclaim the gift; there is, however, a catch. In Re Woodward Estate, the Court held that if the estate trustee has relied upon the disclaimer, the disclaiming beneficiary can no longer retract their disclaimer and will therefore be unable to reclaim the gift.20 This appears to leave the door open to beneficiaries who have disclaimed gifts to attempt to reclaim them, provided that the estate has not relied upon the disclaimer. While there may be reasons to disclaim a gift, since disclaiming can be like crossing the Rubicon, it is prudent to seek legal advice before charting any particular course.
Footnotes
1. Rubner v. Bistricer, 2018 ONSC 1934 at para 128. ↩
2. Re Woodward Estate, 2001 BCSC 635, 38 E.T.R. (2d) 139, at para 4. ↩
3. Ibid. ↩
4. Ibid., at paras 6-7. ↩
5. Ibid., at para 8. ↩
6. Ibid., at para 10. ↩
7. Ibid., at para 11. ↩
8. Ibid., at para 12. ↩
9. Ibid., at para 15. ↩
10. Ibid., at para 20. ↩
11. Ibid., at para 20. ↩
12. Ibid., at paras 16, 19. ↩
13. Ibid., at para 13. ↩
14. Ibid., at para 14. ↩
15. Ibid., at para 20. ↩
16. Ibid., at para 24. ↩
17. Ibid., at para 26. ↩
18. Ibid., at para 26. ↩
19. Ibid., at para 27. ↩
20. Re Woodward Estate, 2001 BCSC 635, 38 E.T.R. (2d) 139. ↩
